Please stand by, we’re about to begin. Good day, everyone. Welcome to the Galmed Pharmaceuticals’ Second Quarter 2015 Earnings Call. As a reminder, today’s conference is being recorded. At this time, I’d like to turn the conference over to Mr. Josh Blacher, CFO. Please go ahead, sir.

Good morning. And thank you, Allan. And thank you for joining on today’s conference call. I’m pleased to be joined today with President and CEO, Allen Baharaff; and Chief Medical Officer, Dr. Maya Halpern to report to you on our financial results for the second quarter of 2015 as well as to provide you with an update on our clinical development programs. As always, we will be happy to take questions you may have at the conclusion of our prepared remarks. Before we begin, please note that we will be making certain forward-looking statements on today’s call, including those regarding financial results, statements and forecasts regarding anticipated timelines and expectations with respect to our regulatory and clinical development programs, as well as other statements that relate to future events. These statements are based on the beliefs and expectations of management as of today and actual results, trends, timelines and projections relating to our financial position and projected development program and pipeline could differ materially. We urge all investors to read carefully the risks and uncertainties disclosed in our filings with the SEC, including without limitation the risks under the heading, Risk Factors, described in our annual report on Form 20-F filed with the SEC, and the risks and uncertainties included in the Form 6-K filed with the SEC earlier today. Galmed assumes no obligation to update any forward-looking statements or information which speaks as of the respective dates only. This morning, I will be providing you with our financial results for the quarter ended June 30, 2015. For more information, please refer to our quarterly report on Form 6-K filed earlier today with the SEC, which among other things provide the summary of such financial results. For the second quarter 2015, our net loss totaled $2.4 million or $0.21 per…

Thank you, Josh. As discussed previously, we officially commenced the ARREST Study during the first quarter of 2015. Professor Vlad Ratziu served as the ARREST Study principal investigator and Professor Rohit Loomba, as the study’s U.S. principal investigator. We believe the ARREST Study has made very significant strides during the second quarter. First, our clinical site in Israel increased its enrollment of patients. In addition to strengthening patient recruitment, our operating experience in Israel to-date has also served to optimize the trial execution across the United States, Latin America, and Europe. Importantly, we also achieved substantial progress with regard to our regulatory approval during the second quarter. Currently, 52 out of sites have been approved by their respective Ethics Committees. Equally also important, the ARREST Study in the United States and Latin America commenced during the second quarter and patient screening has now started in both territories. Regarding our activities in Europe, we expect our first patient to be screened next month. The impressive ramp up in clinical activity is a direct result of the outstanding effort of our new Vice President of Clinical Operations, George Tonelli, who joined us just five months ago. In total, the US-based clinical team comprises six clinical research professional with an average of 20 years of industry experience. We still remain confident that we will have enrolled the first 120 patients in the trial by the end of 2015, which will allow us to stay on track for releasing the interim results around June 2016. That being said, we are taking this opportunity to realign the timing of the release of the final data of the ARREST Study. Based on the protocol, 240 patients will need to have completed 12 months of treatment of Aramchol, in order to complete the study, followed by a…

Thank you very much, sir. [Operator Instructions] We’ll take our first question from Jason Kolbert with Maxim.

Hi, Allen, Josh, Maya, it’s actually Jason McCarthy for Jason Kolbert. I have a couple of questions. So first of all, sounds like things are continuing to go very well for Galmed. We continue to be very positive about the company. First, can you walk us through some of the noninvasive endpoints you’re exploring? I know you have MRI and magnetic spec, their two methods. And you’re also looking at metabolic markers with One Way Liver Genomics. Can you tell us which ones you believe may have the most potential and have you been in discussions with regulators regarding which may or may not potentially be approvable endpoints?

Okay. Maya, would you like to take that?

Okay. Thank you, Jason for the question. In fact, we did not discuss it with the regulators, but the regulators, FDA put clearly in their guidance that was published earlier this year thus we are looking for noninvasive endpoints to add to the clinical trials. Then you mentioned MRI interval [ph] assessments. This is why we are very optimistic about validating the MRI. It’s even mentioned this as a possible endpoint for the approval. They recommend companies to come and discuss these technologies. The second one is what we announced already – the metabolomics, our technology, which has been validated over these as a way to differentiate between NAFLD and NASH. And we are hoping to transform it into a companion diagnosis. And, of course, we have the regular noninvasive blood markers PK18 or the inflammatory markers, we are using the validated [Fibro 10 and Fibromark] [ph], but those are existing validated endpoints, which we do not think will be taken forward into the realize this. Those are – over the – in clinical trials for all the companies we are looking for something specific for Aramchol and we think that our fMRI are the best candidate.

Okay. Thank you. And can – well assuming that the Phase IIb, the ARREST study, has positive data, assuming that you do have success, have you – given this question is for all three of you, have you given any thought to the potential design of a Phase III study in terms of trial size, which might be influenced by what the FDA will accept as endpoints? And how much could Phase III trial in NASH cost?

Okay. First of all, we have the benefit of, as I said, all along not being deferred and as a company some way operating our way. So we have the benefit of enjoying the protocol that thesis that have recently concluded – the Phase 3 protocol, the thesis that are recently concluded with the FDA, which is a nutshell conditional approval up to 1,440 patients and we do endpoints, which is the resolution of NASH and one-point improvement of fibrosis. We did not discuss that with the FDA. We obviously, we will discuss only when we complete our Phase IIb, when we come to the end of study – end of Phase IIb discussion with FDA. But we had the similar remark from the European authorities. We had three pre-IND meetings with German, French and British regulators. And they all discussed roundabout similar number, about 1,200 patients in the pivotal Phase III. Now, as to cost, we have estimated – I mean, those – it depends, of course, whether it will be between how many patients will be in the U.S. and how many in the rest of the world, because in U.S. it normally costs more, but it should be in the region of $100 million. This is what we budgeted the study for.

Okay, okay, great. Thank you. Sounds like everything is going well. Thank you very much for taking my questions.

Thank you, Jason.

Next, we’ll go to Elemer Piros with ROTH Capital Partners.

Good afternoon, Maya. Good afternoon, gentlemen.

Hi, Elemer.

Hi.

Yes.

Yes, Elemer, hi.

Based on your experience in Israel, how many patients would you have to screen to enroll one? That would be my first question.

Okay. Maya?

Okay. Thanks for the question. We pleasantly surprised to see that we have screen failure of 50% in Israel. It was a good surprise, because we think we put the much lower in the space, where they are more experience in doing biopsies. And so, we think the screen failure will be around 50% – between 40% and 50%. We have to bring, of course, 10 patients to recruit between 6 and maybe around 6.

Thank you, Maya. And also – if you can refer back to the Genfit study, they had some difficulty with sites that enrolled only a handful of patients. And they had to exclude those data points from their final analysis. Do you have a minimum number of patients per site requirement in order to avoid that potential complication?

We don’t have a minimum, but with this feasibility, a very slow feasibility study of more – maybe more than two years with a different investigator. And, okay, there is that – normally in the majority of sites the recruitment rate will be between 1.5 to 2 patients per month. And there are obviously some sites, this is not for the U.S., this is by the way mainly for Europe and Israel. In the U.S. this is higher, and obviously, there will be sites like for our principal investigator comes from Vlad Ratziu who was also the principal investigator of Genfit that will recruit – that will have many more. Latin America is going to be much, much higher. So I think that the 120 patients for the interim analysis would mainly come from the U.S., Chile, Mexico and Israel, and that’s, from Europe which is starting belated. So we are busy. When we designed the study is we have the second large wave, because investigators are already going through list of potential patients. And it’s busy, as you know we can also include in the study patients that undergone biopsy in the last six months. Now, that we have approval, so we have – so many approvals are underway. Patients – physicians can already start looking and they’re currently waiting for the break of our European patients. And we still believe it would be in the second wave after the 120 patients. Now, I was thinking that another issue, which is very important to highlight, and this, again, we learnt from the experience of Genfit and with – or just into Vlad Ratziu, who is working with both there. We made sure that randomization is done on a global basis. So there were some problems, but the problems in the GOLDEN study were due to the fact that it was not done so. And we are using an IP-ARREST [ph], globally IP-ARREST system and it shows that all sites will have both acid and placebo patients in. [indiscernible] of five, two-to-one. So if you remember, the – it is not equal. The way we allocate is two-two-to-one, the way we allocate the patients. So we are hoping that will be at least five patients in these sites.

Yes. Thank you very much. And can you report Allen, how many patients have been enrolled in Israel so far?

We have 14, it keeps on changing, but we have 14 sites active in Israel. And I cannot tell you the number exactly, I don’t do on top of my head, because this will keep on changing, and the screening, just many screened and in process. So any number I will give you will just confuse you.

Okay. And lastly, can you please talk about have you made any progress on the gallstone indication? What would be the right population for – the patient population for the treatment?

Okay. Now, as we communicated in our last investor’s call and press releases and 6-Ks, we decided to put a study on hold and redesigned the protocol. We find out that the recruitment is going much, much slower. First of all the prevalence is much slower. It’s not yet, I mean, [indiscernible] talk about 50% of patients that undergo bariatric surgery develop gallstone within six to eight months after their operation and it is not so. We saw much, much lower prevalent. Recruitment was also, in terms of compliance and recruitment, these are kind of healthy people, and they are not really inclined to enter clinical study. So we started to put the study on hold, we are sure that before we will not concentrate and ensure [ph] that our ARREST study timelines are on track that we do not deviate from what we planned and what we communicated. And once, we feel that ARREST is on track, we will revisit the GOLDEN study and redesign the protocol.

Thank you so much, Baharaff, and congratulations on the great progress.

Thank you.

Next we go to Vernon Bernardino with MLV & Company. Mr. Vernon, your line is open. Please go ahead.

Sorry, I guess, I was on mute. Can you hear me now?

Yes, we can.

Okay. Thank you. Sorry about that. Thanks for taking my question. And Dr. Michal Ayalon, I welcome, I hope to meet you in the very near future. Regarding the question about the number of patients that, perhaps, you got an idea from talking with the German, French, and British regulators, I think you mentioned 1,200 patients was the impression that you’ve got from them would be – look at for pivotal Phase III?

Right.

And so, with the Intercept, as you know, their Phase III is 1,400. Do you think this number is actually adequate? And with your – the 1,200 patients that you got from the German, French, and British regulators that would only be a one dose right, but Intercept has actually two doses. So the 1,400 patients would actually be divided one-two-one-two-one?

Right. So, this – our assumptions that 1,200 for one dose will be enough, because we are taking now the two doses, and we choose the dose we take forward in a pivotal study. So, in fact, we had 1,200, it gives us more power than the 700, the point you’re making, 700 that they do for one dose.

Yes. Exactly that’s…

Does it make sense?

Yes. That’s exactly my point. And so you kind of already – you already talked about the gallstone strategy, but do you have an update on any other clinical activities that are ongoing or planned?

We cannot – we did not communicate yet, but we are certainly, I mean, on the stores, and that we are cooking [ph] under our studies, and we will – once we will be able to have news – once we have news we’ll certainly communicate those. And Michal, I mean, this is part of the work that Michal does, is really treating us doing the GAAP analysis on missing data and preclinical data that needs to be – that we need to or study that we need to do before we’ll be able to announce new clinical study.

Okay. Then regarding the enrollment of patients, I believe you mentioned that the second-half of the 240, which is 120 patients. So, 120 patients will be mostly enrolled outside of Europe?

First, in the second – I mean, we think there’s about 80, or all-in-all around 80 patients will be enrolled on the U.S., and 60 will be enrolled in Latin America, and the rest will be in European regions.

Okay. And I didn’t catch exactly what the answer when – you discussed some of your views on the GOLDEN results in the trial design. What was the system you believe mentioned that was not done?

Randomization, then, Maya, I’m going to close to…

Okay. So we know this from the publications. One of the limitations of the study was, of course, they included patients with a very low activity of NASH with NAS score of below four. I think 30% of the patients – around 30% of their patients has a NAS score of three, which made their analysis weaker, because in this group, patients had in the placebo group the same success, the same outcome like in the active group. The second thing is that they head many centers like we do, but their randomization was not done centrally. So it happened that one, let’s say, one center that got a group of, I don’t know, six patients, they specific in recruiting only three, and all of them, it’s just an example, all of them were placebo. So there were differences in the standard of care between the center that recruited very few patients and had exactly the same kind of patients. So we correct and they probably reaches the limitation. And we learn from this, and we are doing the central randomization in order to make sure that each center has the opportunity to recruit from the active and inactive group, and do not exclude the analysis by having only one kind of patients.

Perfect. That’s a good lesson to learn. And then, let’s see. I believe that’s all the questions I have. So I’ll get back in the queue. Thank you for taking my questions and looking forward to the continued progress.

Thank you very much, Vernon.

We’ll take our next question from Yi Chen with H.C. Wainwright.

Thank you for taking my question. I’m just wondering when you enroll the patients at different sites in different countries, do you observe any difference in terms of percentage of patients who have NAS score above four and qualify for your trial, out of all the patients that you screen?

Okay. This is a very good question, but it is a bit early for us to discuss, as we experienced only – right now, only with Israel, it’s what’s the epidemiology of NASH and its severity. it has been published and probably there is a higher prevalence and higher severity in the Latin American countries. This is why we are going there for the study in order to enrich our population and give the opportunity of the Latin population to get in the study. We’ve seen that – as far as we know the other countries do not have a very specific profile in their NASH population.

Thank you.

[Operator Instructions] Our next question will come from Adam Collin [ph] with MLV & Co.

Hello, I’m actually also working with Vernon. I was very interested in your presentation. This is one small question on the study design. I noticed that to be in the trial you have to have an A1C of less than or equal to nine, I was just curious about how you came up with that number?

Well, first of all this number came from the advisory board who though that the patients should be treated for diabetes, but we can also recruit patients which have been newly diagnosed with diabetes. And the cut-off of nine is accessible clinically, and it does not restrict too much our pool of population, this is the highest, of course, this is higher clinically. We do not want patients who are not treated for their diabetes. We can get lower than that.

Okay, okay. Thank you.

[Operator Instructions] We’ll now go back to Vernon Bernardino with MLV & Co.

Hi, thank you for taking my follow-up question. I remember from the initial disclosure of the ARREST study design, you’d mentioned that many of these patients who’ll be rather early stage and lot of them will have some form or some degree of either diabetes or insulin resistance. What exactly again are the type of date you’re interested in gathering from those type of patients as to Aramchol’s potential effects?

Okay. Thanks again for the question. We know that diabetic patients have some high prevalence of NASH, and also higher risk of advancing from that to fibrosis and cirrhosis. So this is why we want to focus on diabetic patients, which are the best to have – best advantage from benefits and risk benefit from being treated with Aramchol.

Okay. Thank you for taking my follow-up question.

And it looks like there are no further questions at this time. So I’d like to turn it back over to the management for any further remarks.

Thank you very much everyone for joining today. And feel free to give us a call with any additional questions or comments. Have a good day.

And that does conclude today’s conference. We thank everyone again for their participation.